IMF slashes US growth forecast, sees 'narrowing path' to avoid recession

25/06/2022 9:06:00 AM

If large enough, a shock could push the United States into a recession, but it would likely be short and shallow with a modest rise in unemployment, says the International Monetary Fund

If large enough, a shock could push the United States into a recession, but it would likely be short and shallow with a modest rise in unemployment, says the International Monetary Fund.

If large enough, a shock could push the United States into a recession, but it would likely be short and shallow with a modest rise in unemployment, says the International Monetary Fund

US inflation by the Fed’s preferred measure is running at more than three times the US central bank’s 2% target.In the face-to-face talks, the allies will take stock of the effectiveness of sanctions imposed so far against Vladimir Putin's Russia, consider possible new military and financial aid for Ukraine, and begin turning their eye to longer-term reconstruction plans.The Biden administration has vowed to commit more resources to the Indo-Pacific as China seeks to boost economic, military and police links with Pacific island nations hungry for foreign investment.But any temporary pain caused by a recession would be "a necessary price to pay" to defeat damaging inflation, she said.

Georgieva said the responsibility to restore low and stable inflation rests with the Fed, and that the fund views the US central bank’s desire to quickly bring its benchmark overnight interest rate up to the 3.5%-4% level as “the correct policy to bring down inflation.Ahead of the summit of G7 most industrialized nations which will be hosted from Sunday at the Bavarian mountain resort of Elmau Castle, German Chancellor Olaf Scholz warned that allies would need stamina in shoring up Ukraine.” The Fed’s current policy rate ranges from 1.We are also united in how we realize this vision — according to principles of Pacific regionalism, sovereignty, transparency, accountability, and most of all, led and guided by the Pacific Islands," the White House said.50% to 1."It is therefore all the more important that we stay firmly on course -- with our sanctions, with internationally coordinated arms deliveries, with our financial support for Ukraine.75%.While the IMF is confident the Fed's rate hikes will bring down inflation, "We are conscious that there is a narrowing path to avoiding a recession," she said in a statement.

“We believe this policy path should create an upfront tightening of financial conditions which will quickly bring inflation back to target.After the G7 summit closes on Tuesday, the leaders will head to a gathering of NATO powers in Madrid." —Reuters.We also support the Fed’s decision to reduce its balance sheet,” she said.While Congress’ failure to pass US President Joe Biden’s climate and spending proposals was a “missed opportunity,” Georgieva signaled that the IMF would support a scaled-down version.'Increase pressure' Western allies have supplied Ukraine with billions in financial aid and armaments, with the US leading the charge with $5.“We think the administration should continue making the case for changes to tax, spending, and immigration policy that would help create jobs, increase supply, and support the poor,” she said.Georgieva also said the IMF sees clear benefits to rolling back the US import tariffs imposed over the last five years, which include punitive duties on Chinese imports and global tariffs on steel, aluminum, washing machines, and solar panels.But as the war drags into its fifth month, Ukraine has repeatedly warned that it needs far more support to withstand the grinding Russian assault.The IMF chief said the battle against inflation must be the "top priority" despite the impact a US slowdown might have on the global economy.

US Treasury spokesperson Michael Kikukawa said the IMF statement shows the US economy was confronting global challenges “from a position of strength” due to the Biden administration’s economic policies.The Treasury also said Yellen, in her meeting with Georgieva, reiterated the importance of the IMF conducting “frank and thorough assessments” of IMF member economies.Washington said leaders at the G7 plan to "roll out a concrete set of proposals to increase pressure on Russia.–, it has exposed the Achilles heel of energy reliance that continues to crimp the ability of major players like Germany or Italy to go all out in punishing Moscow.

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